How Costly is Turnover? Evidence from Retail

Peter Kuhn and Lizi Yu

No 26179, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate turnover costs in small retail sales teams using daily sales data and an advance notice requirement to address endogeneity concerns. In addition to short-staffing and onboarding costs, we identify two less familiar sources of turnover costs: incumbent workers’ recruitment activities, and reductions in team morale after a departure is announced. Our estimates of total turnover costs are relatively modest, however: Ten percent higher turnover is about as costly as a 0.6% wage increase. We attribute these low costs to a set of complementary personnel policies which ensure that only 25 percent of departures result in a short-staffing spell.

JEL-codes: J31 J63 J64 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-hrm and nep-lab
Note: LS
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Citations: View citations in EconPapers (2)

Published as Peter Kuhn & Lizi Yu, 2021. "How Costly Is Turnover? Evidence from Retail," Journal of Labor Economics, vol 39(2), pages 461-496.

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